closing in. powerful hurricane earl on target to strike the north carolina coast later today. hostage drama. a gunman with a grudge against the discovery channel is shot dead by police. and back to the table. the first face-to-face middle east peace talks in nearly two years get under way today in washington. this is the "cbs morning news" washington. this is the "cbs morning news" for thursday, september 2, 2010. captioning funded by cbs good morning, everybody. thanks for joining us. i'm betty nguyen. we begin with hurricane earl, which is expected to strike the north carolina coast later today. president obama has declared a

state of emergency and folks on hatteras island have been ordered to evacuate. earl is a large and powerful category 4 storm with sustained winds of 140 miles per hour. after earl strikes north carolina, it is expected to move north but will likely stay offshore. a hurricane warning is in effect from bogue inlet, north carolina, to the virginia border. a hurricane watch from cape henlopen, delaware, and also includes martha's vineyard. karen brown is in kill devil island with more. good morning, karen. >> reporter: good morning. earl picked up steam and it is tracking closer to the outer banks. about 50 miles off cape hatteras. that is where it is expected to pass. in the communities of -- south of here, there are those mandatory evacuation orders for known nonresident and they have until this morning to get out. kevin isn't sticking around for earl, even if it means cutting

his labor day weekend short. >> better to be a little disappointed instead of washed away or something. >> reporter: the monster hurricane could reach north carolina late tonight or early friday before rolling up the east coast. watches and warnings stretch all the way to cape cod, massachusetts. while earl is expected to stay offshore, as it makes its way north, a slight shift could put millions in harm's way. >> that's why it's important to take the time now while the skies are clear and weather is great to make sure you have a plan and you're ready just in case. >> reporter: many aren't wasting any time, boarding up -- >> you never know what flying debris you'll get. >> reporter: -- and moving out. wednesday officials ordered thousands to evacuate the outer banks. not since hurricane bob in 1991 has a storm threatened so much of the eastern seaboard. here in north carolina where the rip current is already a concern, the governor has declared a state of emergency. they've done the same for the coastal regions of maryland and virginia. but some tourists refuse to let

earl ruin their fun in the sun. >> this is our 14th year here. i'm not ready to go back to new york and get into my routine. >> reporter: for those that don't have a place to ride out the storm, red cross shelters are being set up. >> the shelter is never the best place to be living in, but we will make sure that they have a place to sleep, that they're dry, that they have food to eat. >> reporter: supplies they hope won't be needed this time around. now, adding to the potential for trouble, forecasters say that tonight's high tide will coincide pretty closely with earl's arrival. of course, the storm surge, a huge concern with a hurricane of this size. but i have to tell you, many of the residents here in the outer banks, they're taking it all in stride. they tell me they're going to wait to see how the day develops before they decide if they'll board up or get out. >> hopefully they won't wait too long and it's too late. karen brown, we appreciate that. through the night police searched the maryland headquarters of the discovery channel for explosives.

a gunman with an apparent grudge against skoef channel's environmental programming held hostages wednesday. he had one bomb strapped to his body. the gunman is dead and hostages are safe. whit johnson reports. >> reporter: employees of a day care center inside the headquarters for discovery channel wheeled babies and cribs out of the building after a man armed with a gun and explosives stormed into the lobby. >> he was wearing what appeared to be a metallic canister devices on his front and back. he also pulled a handgun out and was waving a handgun. >> reporter: police say a gunman, 43-year-old james lee, took three hostages, two employees and a security officer. the standoff ended when he pointed a gun at the hostage, a s.w.a.t. team officer shot and killed him. all hostages got out safely. >> i need all pedestrians to clear this block immediately. >> reporter: the standoff paralyzed the area around the

building as 1900 employees evacuated, including this woman. >> we got down on the floor, prayed. >> reporter: lee was well known to management at discovery. he had a long history of protests against the network for its programming. he was ordered to stay 500 feet away from the building after he was arrested in 2008 for throwing money to attract attention to his protest. his probation ended just two weeks ago. >> we certainly were cognizant and aware of him but did not take his threats or demands seriously. >> reporter: police are making sure any explosives still in the building are secure before allowing anyone back in. whit johnson, cbs news, maryland. later today, engineers plan to remove the temporary cap that first contained the gulf oil leak. once they remove the cap, engineers can raise the blowout preventer which failed to stop the leak in the first place. when all of that is completed, they can start to plug the damaged well for good. for the first time in 20 years, the number of illegal immigrants in this country has declined.

a report from the pew institute says the bad economy and tougher border security are two of the reasons. last year there were about 11 million illegal immigrants living in the u.s. that's 1 million fewer than in 2007, which is an 8% drop. later this morning, the first direct peace negotiations between the palestinians and israelis in nearly two years is scheduled to get under way. the obama administration brokered the meeting. in the president's words, the moment of opportunity may not soon come again. tara mergener is in washington with the latest. good morning, tara. >> reporter: good morning. both sides will get down to business today at the state department. by all accounts, expectations are actually pretty low. but the president says he is cautiously hopeful. >> do we have the wisdom and the courage to walk the path of peace? >> reporter: with a diplomatic push from president obama, israeli prime minister benjamin netanyahu and palestinian president mahmoud abbas will

relaunch talks today after nearly two years of silence. they joined president obama for a private meal at the white house last night after each promised to work for a breakthrough. >> we must learn to live together, to live next to one another and with one another. >> reporter: the four main issues dividing them have been the same for decades -- the borders of a palestinian state, israeli security, jerusalem, whether palestinians, too, can claim it as their capital and the right of palestinian refugees to return to lands from which they were forced to leave. another major issue, israeli settlements on disputed lands. a ten-month-old moratorium on israeli construction in jerusalem in the west bank expires later this month, threatening to end talks before they can really begin. and the shadow of violence looms over any possible progress. separate attacks in the west banks this week left six israelis dead. president abbas condemned the killings and ordered the arrest

of 250 members of hamas. >> the bar is set high. my fear in the middle east, if it's all or nothing, it's nothing. getting nothing plays into the hands of the radicals. >> reporter: and no matter what happens today, the hope is there will at least be another round of talks soon. betty, back to you. >> tara mergener joining us live in washington, thank you. chile's president says those 33 trapped miners won't be rescued until christmas, but mine experts say they could be out sooner. this is the latest video inside the mine. a half mile under the surface. the men have been trapped since august 5th. they've also received their first hot meals, being meat balls, chicken and rice. nasa doctors on the scene to advise the government say the miners' request for alcohol and cigarettes should be denied. well, at least for now. just ahead, a summer slump for auto sales. plus, out of control.

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happiness is always in season. visit, call or go to ediblearrangements.com. this is what can happen if you fall asleep at the wheel. this was last month in western massachusetts, caught on security video. an suv swerving off the highway and into a convenience store. fortunately, the store was closed and no one was hurt, including the driver and her young daughter in the backseat. now, this looks like a bad crash. but amazingly, the guy on the motorcycle was not seriously hurt. it happened monday in iowa city, iowa, caught on a police car dash camera. the motorcycle rider is a football player at the university of iowa. the driver of the pickup that hit him, well, he got a ticket. officials of the company that makes the wrinkle-smoothing drug botox will be in court in washington today to settle a

federal investigation of its marketing. the company will admit it misled doctors to use botox for unapproved purposes, ranging from headaches to cerebral palsy. allergen has agreed to pay $600 million in fines to federal and state governments. on the "cbs moneywatch," a second straight gains for asian stocks. ashley morrison is in new york with the latest on that. good morning. >> good morning to you, betty. investors in asia were in a buying mood. japan's nikkei jumped more than 1.5% while hong kong's hang seng was also higher. today wall street gets the latest on home sales as well as a look at the weekly jobless claims. wednesday good news about manufacturing started september off with a bang. the dow soared 254 point while the nasdaq jumped 62. fed chairman ben bernanke is set to appear before the commission examining the root causes of the financial crisis. he'll give his take on the meltdown and what potential risks remain.

under new financial reform regulations, regulators can shut down big institutions whose collapse could threaten the entire system. auto sales are stalling. gm sales fell 7% from july to august and 25% compared to august a year ago when the cash for clunkers program was in effect. ford and toyota also saw sales slip. chrysler is the one bright spot. sales were up 7% compared to august of last year. users of apple's itunes can now see what songs their friends are buying. apple's new service ping delivers a stream of updates showing friends' itunes purchases and other information, including where favorite bands are playing next. ping is an optional service. you can choose to keep your purchases private. and gossip in the workplace may not be so bad after all. a study in the harvard business review found gossip helps relieve employee anxiety. it turns out bosses gossip with

far more people than their workers do. the research also found more of the gossip is actually positive rather than negative. betty, i feel like with the hours we work, i miss out on all the gossip, whether it be good or bad. i usually find out three weeks after the -- >> girl, i've got gossip for you. no, i'm kidding. ashley morrison joining us live in new york. thank you. straight ahead, your thursday morning weather. in sports, it is base brawl in florida in a game that saw fists fly and a half dozen ejections. fists fly and a half dozen ejections. erywhere... and i wondered what it was. i found out that connected to our muscles are nerves that send messages through the body. my doctor diagnosed it as fibromyalgia, thought to be the result of overactive nerves that cause chronic, widespread pain. lyrica is believed to calm these nerves. i learned lyrica can provide significant relief from fibromyalgia pain. and less pain means i can do more with the ones i love. [ female announcer ] lyrica is not for everyone. lyrica may cause serious allergic reactions or suicidal thoughts or actions.

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here's a look at the weather in some cities around the country. new york, sunny, 92. miami, sunny, 92 as well. it's 85 with thunderstorms in chicago. denver, windy, sunny, 75. and a sunny 77 in l.a. time for a check of the national forecast. the latest satellite pictures shows clouds are scattered across the northern plains while the west is mainly clear. later today, a few scattered showers will develop over the northern plains. the northeast and southeast remain hot and dry. heat returns to the southwest. and scattered showers and thunderstorms will be popping up around the ohio valley. in sports, the florida marlins beat the lowly washington nationals 16-10, but the real action start when marlins' pitcher chris volstad hit nats' center fielder nyjer morgan and then threw behind him two innings later as a payback for an incident on tuesday.

morgan charged the mound, triggering a full-scale brawl that led to four ejections, including volstad and morgan. who raised his arms as he left the field. it still was not over. in the next inning another hit by pitch produced two more ejections. in the american league, manny ramirez finally got into the lineup for the white sox, but wound up watching the game big blow from on deck as paul konerko hit a game-winning three-run homer. the sox beat the indians 6-4. now to the u.s. open and a scary moment on the court. half an hour into her first match of the day, victoria azaranka of belarus wobbled and then she slapsed. she was taken off in a wheelchair and later explained she hit her head in a warm-up session. well, it turns out she had a concussion. when we return, another look at this morning's top stories. and taxing decisions. the debate over whether to extend tax cuts for the wealthy. extend tax cuts for the wealthy. if you fight to sleep in the middle of the night,

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on the "cbs morning news," here's a look at today's weather. scattered showers and thunderstorms will be developing from the southern plains to the ohio valley. the northeast and southeast remain hot and dry. and triple digit heat returns to the southwest. here's another look at this morning's top story. hurricane earl is on target to hit the north carolina coast later today. the storm packing 140-mile-an-hour winds is then expected to skirt the eastern seaboard. and the first face-to-face peace talks between israelis and palestinians are scheduled to begin this morning in washington. president obama says he's cautiously hopeful. now to the struggling economy and one of the most hotly debated questions facing congress this fall, should lawmakers let the bush tax cuts for high income americans expire at the end of the year as president obama wants?

anthony mason reports. >> reporter: the recession hit dave campbell's lumberyard in connecticut hard. letting the bush tax cuts expire, he says, would cut even deeper. >> it just takes more cash out of our business and it's less people we can hire. it's a big deal. >> reporter: many economists agree. it's a hit the economy can't take right now. >> i think if the tax cuts expire, for everybody, then we'll be back in recession, no doubt. it would be a huge policy mistake. >> while we extend middle class tax cuts -- >> reporter: president obama has proposed extending the cut for individuals making less than $200,000 and couples making less than $250,000. but under his plan, the top two income tax rates, now 33% and 35%, would revert to levels before the bush administration of 36% and nearly 40%. >> what kind of impact would that have? >> i mean, it would actually have, i think, a pretty detrimental impact. >> reporter: the reason, says

david with jeffries and company, the top 3% of households account for a quarter of all personal spending. >> the easiest path is probably just kick the can down the road strategy. >> i would extend the tax cuts for everyone, at least in 2011. i wouldn't raise anyone's taxes next year. when the recovery is so fragile. >> reporter: but extending tax cuts for the wealthy would cost $700 billion over the next decade, according to the congressional budget office. >> leave us alone. let us do our business and don't worry about raising taxes at this point. >> reporter: a recent survey of economists found that 5 4% support extending the tax cuts. republicans hope to bring up a vote on the issue before the november elections. anthony mason, cbs news, new york. shifting gears now. when it comes to dancing, this dog has talent. kerry, the golden retriever is seen dancing with her owner, decked out in full costume. she appears to know every move

of the three-minute choreographed routine. my goodness, that is wild looking. by the looks of it, she seems to enjoy every bit of it. her enthusiasm may be contagious. the video has gone viral in the last few days with about 1 million views. i'm betty nguyen. this is the "cbs morning news." ning news." it's almost tee-time... time to face the pollen that used to make me sneeze... my eyes water. but now zyrtec®, the fastest 24-hour allergy relief, comes in a liquid gel. zyrtec® liquid gels work fast, so i can love the air®. comes i♪ a liquid gel. hurry in and load up on great savings during the petsmart labor day sale. this friday through monday, save up to 50% on select items. and select varieties of tropical fish are $1 each! petsmart. we love to see healthy, happy pets! you know she always finds out. oooh! you ruined mom's tablecloth. not this time. what's that? my get out of jail free card. no way. you're busted. [ chuckles ] [ male announcer ] tide stain release.

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we have a lot of weather to talk about. >> i'll show you the track on radar. or's the bottom line, no huge change. notice out to the west we still have this cold front moving our way. we're kind of right now stuck not middle, a day like yesterday and another weather story that's going above 90. this day we tied the record, set back in 1988. sunny items in the low mid-90s. don? >> we're following several big

stories. the weather is one of them. we'll have complete coverage of hurricane earl. the hostage standoff in d.c. ends in gun fiermt a man storms the discovery channel building. a live report is coming up. an indictment two years in the making. a senator, ulysses currie, faces serious charges, first news, weather and the first traffic report of the morning in a couple minutes. ,,,,,,,,,,,